Less than 24 hours after Senator Barack Obama won the race for the U.S. presidency, Bloomberg reports that Motown’s mauled mavens will step-up their campaign to suckle on the milk of federal tax money. “GM, the biggest U.S. automaker, must get government aid because ‘time is very short,’ said Roger Altman, the former Treasury official advising the company in its merger talks with Chrysler LLC. ‘The consequences of a collapse by GM or all three could be very severe.'” (As opposed to slightly severe.) Step 1: change the terms of the Department of Energy’s $25b worth of no to low-interest loans. Retooling? Fuck that shit. “The industry’s agenda for the new president will be topped by intensified calls for an immediate disbursement of $25 billion in low-interest loans signed into law by President George W. Bush Sept. 30. While the money is supposed to be for the development of fuel-efficient vehicles, automakers argue it should be freed up to meet current capital needs.” Step 2: get a slice of the already-approved banking bailout bucks. “Sympathetic lawmakers also have been calling for auto lenders, if not the manufacturers themselves, to get some of the $700 billion bailout fund set aside for financial institutions.” Do you really have the stomach for this stuff? Read on…
Posts By: Robert Farago
Initially, GM CEO Rick Wagoner’s sale of 51 percent of The General’s captive finance unit to Cerberus Financial (Chrysler’s new owners) seemed like a well-timed stroke of luck. Anyone paying close attention (i.e. reading this site) would have realized that Red Ink Rick was simply throwing GM’s furniture into the cash conflagration consuming the company; GMAC was just about all that was left worth burning. But GM had used GMAC as the engine for its car sales. When GMAC’s ResCap’s (Residential Capital) sub-division found itself (to be polite) deeply mired in the subprime mess, the lender couldn’t– can’t– lend squat, either on the house OR the automotive front. Not too put too fine a point on it, GM’s getting screwed from both ends. Bloomberg reports that GMAC’s taken a $2.52b hit in Q3, which brings us to $4.6b for the year. “Total net revenue declined 43 percent to $1.72 billion. The Residential Capital home-loan unit lost $1.9 billion during the quarter, while GMAC’s auto finance unit lost $294 million.” Even GMAC admits– in that “give us a bailout” kinda way– that it’s towel-throwing-in time. “Substantial doubt exists regarding ResCap’s ability to continue as a going concern,” GMAC said in today’s statement.If ResCap dies, GMAC dies. If GMAC dies, well, we’re almost there already. GM’s 45 percent sales drop in October reflects the loss of low credit score in-house financing. Hear that sound? It’s Uncle Sam’s wallet creaking open…
I know: we’ve been down this road before. But hey, GM provides us with these neat-o-keen videos for bupkis, and TTAC’s added thousands of new readers since the Best and Brightest last weighed-in on the topic. [NB: That’s one Hell of a condescending, snarky intro there GM.] There’s still a lot debate on the ideal frequency of oil changes given make, model, driving style, height, weight and blood group. And there’s still info out there predicting catastrophic consequences should you fail to change your oil religiously (votive candles optional). Personally, I change my oil whenever those damn idiot lights go off– even though I’m sure I don’t need to change my oil that often. My OCD won’t let me drive with warning lamps lit, and I’m not about to do the reset deal, ’cause then I’ll forget and… peace of mind. You?
You might say that this plan– getting Uncle Sam to subsidize new car payments– is a warm-up for the main event: the big ass bailout. And you’d be both wrong and right. Right, because Detroit is using all the political leverage it can muster to extract whatever drops of sustenance it can secure from the federal teat. In that effort, Motown’s running all sorts of ideas up the proverbial flagpole, including perverting manipulating the federal tax code. And lo and behold, Toyota saluted it! “Toyota would be supportive of moves such as tax deductibility of auto loans,” ToMoCo’s U.S. Veep for corporate affairs said on his post- October-bloodbath conference call. Needless to say, GM was non-committally committed to the idea, in a general sort of way. “It’s really critical for the governments and the banks to aggressively help us to revive the credit market and facilitate consumer lending activities,” Mike DiGiovanni, a GM sales analyst, said on his conference call reported by Bloomberg. As for the “wrong” part, this measure, and the “cash for clunkers” initiative making the rounds, wouldn’t provide NEARLY enough relief for Motown’s mauled motoring mavens. But hey, you gotta start somewhere… Oh wait! They already got those $25b worth of D.O.E. low-interest retooling loans. Only not, ’cause they’re hung-up on “technicalities.” Sorry. Carry on.
First things first. CarGurus.com‘s bailout poll– “Should the government bailout GM and Ford?– was an opt-in affair. Second, it’s a bit of a stretch to assume that 8112 people shopping for cars on CarGurus represent more than 8112 people shopping for cars at CarGurus. Third, the poll was worldwide. Stay with me here. Just 29 percent of the 8112 respondents allow CG to know their physical location. Of those, 29 percent were outside the U.S. These foreign respondents were in favor of a bailout by a margin of 51 to 49. The U.S. contingent (of that 29 percent) voted 59 – 41 against a federal bailout for The General and The Blue Oval Boyz. All in– everyone tallied– the vote was 52 to 48 against. Clear? Fourth, why wasn’t Chrysler in the poll. “Ford and GM seem to be in the news a lot recently,” CG editor Steve Halloran told me. “I really don’t know why we didn’t include them.” Personally speaking, Halloran would “love to see them get bailed out. I’d love to see the American carmakers continue.” That said, “I’m not sure it’s the right thing to do.” If CG’s poll is even remotely accurate, it sounds like Joe Q. Public shares his ambivalence. Somebody get GM spinmeister Steve Harris on the line, STAT!
“GMAC Financial Services has scheduled the release of its 2008 third quarter financial results for Wednesday, Nov. 5, 2008. The press release, including financial highlights, will be issued at 8 a.m. EST via PR Newswire and the GMAC Financial Services media Web site (media.gmacfs.com) and the Residential Capital, LLC (ResCap) news site (https://www.rescapholdings.com/news).
GMAC Chief Financial Officer Robert Hull will host a conference call at 9 a.m. EST to review the company’s performance. The call is expected to last approximately 30 minutes.”
General Motors Corp. (NYSE: GM) plans to release its third quarter 2008 financial results on Friday, November 7, 2008 at 10:30 a.m. ET via PR Newswire and GM Media Online (http://media.gm.com).
In addition, GM Executive Vice President and Chief Financial Officer Ray G. Young will host a conference call at 12:15 p.m. ET. The call will include a review of the company’s third quarter financial results, an updated liquidity analysis and review of its liquidity improvement initiatives, and a question-and-answer session with financial analysts and media. The call is expected to last approximately 90 minutes.
GM Inside News (GMI) is reporting that the next gen Cadillac SRX– an “all new” badge-engineered Saturn Vue if there ever was one (was there?)– and the new Chevy Equinox– a fuel-cell powered CUV if there never was one (was there?)– will both be blessed with GM’s new 3.0-liter direct-injected High-Feature V6. And what’s one of them, you ask? GMI reckons its a 250hp, uh, engine. Although our good friends over at Autoblog are happy to disregard GMI’s info-strictures (“Those were RUMORS though and they are very old rumors”), they’re happy to peg the new motor’s mileage at just under 30mpg (highway?). Should GM make it to that most magical of model years (2010), the Caddy CUV will also have a larger engine option (the CTS’ 3.6-liter V6, not a V8) and the Equinox will have a more CAFE-compliant po-folks 2.3-liter four, good for… moving the CUV from place to place.
In the same press release in which General Motors revealed its 45 percent October sales hit, The General announced that it had brought forward its [now] annual Red Tag Sale. “We’ll do our part to continue fighting against these significant economic headwinds by bringing consumers the highest quality, most fuel efficient and affordable cars, trucks and crossovers that we can,” GM Marketing Maven Mark LaNeve wrote. [How reassuring is that— given GM’s product development freeze.] “To that end, LaNeve announced that GM’s no-haggle Red Tag Event… will provide great deals on most new vehicles in GM’s portfolio by offering a special Red Tag vehicle price and customer cash back. In addition, GM’s recently announced ‘Financing That Fits’ program enables consumers to find financing at affordable rates from GMAC and thousands of other banks, credit unions and financing institutions.” That’s it? No haggle plus the usual blizzard of incentives, special offers, discounts, rebates, trade-in allowance, finance offers and $2k-off coupons? GM must not have read Steven Lang’s “MSRP RIP.” Meanwhile, The Detroit News reports that Toyota’s extended its “Saved by Zero” zero percent finance offers on 11 vehicles ’til December first. Guess who’s gonna win this one? [make the jump for examples of GM Toe Taggers]
BBC Top Gear presenter Jeremy Clarkson better watch out for truck drivers from now on, after making an on-screen joke linking lorry drivers to murdered prostitutes. The Times— the boradsheet that prints JC’s columns– describes the on-screen palaver thus: “The controversial broadcaster made his comment on Sunday night’s programme, on BBC2, as he and fellow presenters James May and Richard Hammond found out what it was like to drive heavy goods vehicles. Bemoaning the constant need to change gear, Clarkson said: “This is a hard job and I’m not just saying that to win favour with lorry drivers, it’s a hard job. Change gear, change gear, change gear, check mirror, murder a prostitute, change gear, change gear, murder. That’s a lot of effort in a day.” The BBC responded with their usual combination of condescension and weasel words: ‘The vast majority of Top Gear viewers have clear expectations of Jeremy Clarkson’s long-established and frequently provocative on-screen persona. This particular reference was used to comically exaggerate and make ridiculous an unfair urban myth about the world of lorry driving, and was not intended to cause offence.” Well, fair enough. As the Times points out, “Notorious prostitute killers Peter Sutcliffe, the Yorkshire Ripper, and Steve Wright, also known as the Suffolk Strangler, were both lorry drivers.” More worryingly, the BBC has “convinced” YouTube to remove the video clip in question from general circulation.
Chrysler’s CEO Bob Nardelli wants his troops to know that he made ChyrCo’s cutbacks to batten down the hatches for the current downturn. As opposed to, say, a pre-flip strip. “The difficult actions we have taken in the past, and those that we have just announced, are for one purpose and one purpose only: helping Chrysler survive this economic trough.” Nardelli said in a message to employees [via Reuters]. So… now what? More “down-sizing.” And anyone who suggests that Boot ’em Bob’s hankering for a bailout, buyout, merger or liquidation is a disloyal son of a bitch. “Nardelli said business conditions required a resizing of Chrysler again. ‘Rumors and speculation that these actions are being taken for any other purpose are simply not true.'” Meanwhile… “We don’t think a merger is in the interests of our members,” [Canadian Auto Workers union Ken] Lewenza said on the sidelines of an event at Chrysler’s minivan plant in Windsor. “I don’t see how you can take two sick patients and turn them into a healthy one.” Neither does anyone with a modicum of common sense. And yet, there it is.
“The Monday meeting included House Majority Leader Steny Hoyer, D-Md., and many committee chairmen, including Reps. George Miller, D-Calif.; Chris Van Hollen, D-Md.; Barney Frank, D-Mass.; James Clyburn, D-S.C.; Xavier Becerra, D-Calif.; and Sander Levin, D-Royal Oak. Rep. John Dingell, D-Dearborn, took part by phone, as did other members on the campaign trail. Pelosi also discussed the auto issue separately with Sen. Majority Leader Harry Reid, D-Nev., aides said. Over the weekend, Dingell and Sen. Carl Levin, D-Detroit, spoke separately with the CEOs of General Motors Corp., Ford Motor Co. and Chrysler LLC, as well as United Auto Workers President Ron Gettelfinger.” No conspiracy there, then. Just our duly elected officials looking to “save” Detroit by doing what they do best: spending your hard-earned tax money. And that of your children’s children’s children. The Detroit News names names, but can’t put a number to their/our pain. It looks like doubling down. For now. “The hourlong meeting focused on whether Congress should move to quickly approve up to $25 billion in ‘bridge financing’ to aid automakers through a mounting fiscal crisis. The money would be in addition to the $25 billion auto loan program funded by Congress in September to help retool factories to build more efficient vehicles. Drew Hammill, a spokesman for Pelosi, said ‘discussions (are) ongoing,’ but declined to elaborate on Monday’s meeting.”
Last week was something of a problem for Tesla Motors. After self-appointed CEO Elon Musk announced cutbacks (i.e. fired a bunch of people and closed their Detroit office), Valleywag (amongst others) reported that the Silicon Valley EV maker was down to its last $9m. For a carmaker, that’s like driving on fumes. Well, it turns out that Tesla had a mole in their midst, who fed the Valleywag website inside info. Which is fair enough. God knows TTAC has its spies friends throughout the industry. And the fact that this grass, Principal Thermal Engineer Peng Zhou was outed within the company, is also no big surprise. But the fact that Elon Musk chose to forward Peng’s mea culpa to everyone in the company [full text after the jump], knowing full well someone would leak THAT, is more than slightly worrying. Then again, discretion is not the better part of fanaticism, egomania and old-fashioned cruelty. Or TTAC’s remit, come to think of it. But then we’re in the muckraking business, not EV manufacture. [thanks to you-know-who-you-are]
“General Motors dealers in the United States delivered 170,585 vehicles in October, down 45 percent compared with a year ago. GM truck sales of 97,119 were down 51 percent and car sales of 73,466 were off 34 percent.” And so the death knell sounds for what was once America’s largest automaker, the world’s largest automaker and the world’s most profitable company. As I stated previously, GM is now practically begging for a government bailout. Needless to say, the situation isn’t their fault. “We are obviously disappointed in our results which reflect a difficult comparison with a strong year-ago October performance,” writes Mark LaNeve, vice president, GM North America Vehicle Sales, Service and Marketing. “More importantly, it also reflects an unprecedented credit crunch that is dramatically impacting the entire U.S. economy – from the housing market to big and small companies to banks to family run businesses. The credit freeze has also had a very negative impact on consumers’ confidence and their purchase behavior across America.” Oy. Anyway, in the search for good news, GM points to the new fleet queen Malibu, sales of which are up 129 percent, and the truck sales, which are… at 45k. But then GM really reaches, with hybrid numbers that are, frankly, embarrassing…
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